Rollover 401(k) in Des Peres, MO
Rollover 401(k) in Des Peres, MO. While moving to a new job can be a welcome new opportunity, it can also create confusion about the best way to handle the savings you have in your 401(k) account with your previous employer. Many Des Peres, MO residents don't have the time, knowledge, or interest to oversee multiple retirement accounts or to carefully weigh their best options when considering a 401(k) rollover. At Correct Capital, our experienced team of 401(k) specialists and financial planners will help you navigate your rollover and optimize your 401(k) account. For rollover 401(k) advice in Des Peres, MO, reach out to us today at 314-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Des Peres, MO
In general, there are four different things you can do with your 401(k) account with your old employer. A experienced Des Peres, MO financial advisor like those at Correct Capital will analyze your assets, savings, and 401(k) plan and help you determine which option is best for you. Depending on a variety of factors, we may recommend to:
- Leave the money in your former employer's 401(k) plan;
- Roll over your 401(k) to your new employer's 401(k);
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Take the cash value out of your 401(k).
Taking out the cash value is only truly an option if you need funds quickly. Your previous employer would be required to take out 20% of the balance in order to pay taxes on it. Depending on how close you are to retirement, the IRS may also withhold a 20% early withdrawal penalty, and you would potentially pay even more in federal, state, and local taxes. Meaning, you could lose the majority of your savings.
Another thing to note is that many companies in Des Peres, MO obligate you to move the funds in your 401(k) if your account has less than $5,000 in it. Additionally, you may be required to cash out your plan if the balance is less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Des Peres, MO
Your Des Peres, MO financial advisors at Correct Capital may counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. This is beneficial for several different reasons:
Take Advantage of Special Rules if You Have Publicly Traded Company Stock in Your 401(k)
Net unrealized appreciation (NUA) is the increase in value between the original value and current value of company stock in your 401(k) account. If you won shares of your previous company in your 401(k), you can transfer that difference into a standard brokerage account, and roll the remainder to an IRA. This way, you may pay long term capital gains tax on your company stock — which caps out at 20% for the highest earners — instead of income tax, which may be substantially more.
The Financial Institution of Your Choice
When you opt to put your retirement funds in a 401(k), your employer will decide the 401(k) company holding your funds. By rolling over to an IRA, you'll have your pick of custodians based on how secure they are, the ease of their digital platforms, and the other services they offer.
A Wider Array of Investment Opportunities
While some Des Peres, MO businesses offer 401(k) plans that allow for a wide range of investment opportunities, you will generally have much more flexibility in an IRA than you would in a 401(k) plan. In an IRA, you can invest in any number of assets, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you change jobs frequently, it could be incredibly helpful to incorporate the funds from all your accounts into one plan. That will make it easier to follow how your savings are performing and managing them will be more streamlined. It may also be the better option for long-term growth.
Keep Contributing to Your Accounts
While your money will still grow in you old 401(k) plan, you will no longer be able to contribute more savings to it. By rolling over the funds into an IRA, you will be able to supplement your savings.
The financial advisors of Correct Capital will help you understand if rolling over a 401(k) is right for you, and which type of rollover is preferred. We have over 20 years of experience advising both individuals and business owners in Des Peres, MO with comprehensive 401(k) services. When you retain our services, we'll guide you through important considerations, such as how a 401(k) rollover will affect your tax planning.
Why to Avoid a 401(k) Rollover in Des Peres, MO
Every person's finances vary, and your Des Peres, MO retirement planners at Correct Capital may recommend that your investments are better off in a 401(k) plan; whether that be your an old plan or rolling them over into a new one. Some reasons to choose a 401(k) plan rather than an IRA are:
- If your current 401(k) plan works for you. If the fees aren't too high and the return on investment is good, it may be advisable to keep your savings where they are. If the account stops performing or you change your mind for another reason, you can still roll over your 401(k) at any time.
- Avoid early withdrawal penalties if you are 55. While you can begin taking out funds without a penalty from either a 401(k) or IRA at 59½, a 401(k) does not include a 10% early withdrawal fee if you are 55. A 401(k) may be best if you need or want the money sooner.
- Loans from an IRA are not allowed. While typically not recommended, if you are in a situation where you need to take out a loan from your retirement savings, it is important to know that you cannot take a loan out of either a Traditional or Roth IRA.
- Your employer may match your 401(k) contributions. Employers may contribute a dollar-for-dollar or partial match into a 401(k), while an IRA would only include the money you put into it.
Check out some of the other services we offer in Des Peres, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
Rollover 401(k) in Des Peres, MO | Correct Capital
At Correct Capital, we give all of our clients personalized guidance and tailor our services and advice to their current financial status, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have nearly a century of combined experience helping Des Peres, MO individuals and families with 401(k) rollovers as part of our comprehensive wealth management services. As fiduciary advisors, we are legally and ethically required to manage your account in a way that benefits you and only you. As an independent firm, we will always be direct and objective, and there are no limitations to the services or investment opportunities we can offer you.
Give us a call today at 314-930-4015 or contact us online to schedule an appointment with one of our experienced 401(k) experts and financial advisors today.
